Clyde Hill News: Mayor floats property tax hike to balance budget
Also: Clyde Hill’s police union endorses two candidates; police warn on election campaign sign interference
Clyde Hill’s administration warned that “we’re going to run ourselves out of money” unless the city’s budget deficit is addressed.
Mayor Klaas called a property tax hike “the easiest option” at Tuesday night’s public budget meeting, as the city administrator and finance director helped her float the idea with the city council and residents.
The latest 2024 budget proposal from the administration shows a ~$425,000 shortfall between city revenues and expenditures, making 2024 the fifth consecutive year that Clyde Hill will have an operating budget deficit.
Below, how we got to this budget situation and what residents can expect next.
Also below — warnings from Clyde Hill’s police related to election signs, as well as candidate endorsements from the union that represents Clyde Hill’s police.
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Disclaimer: while I am a councilmember on the Clyde Hill City Council, I write this newsletter in my capacity as an individual resident. Any opinions expressed are my own and not necessarily the position of the city. City information and references here are from public sources. I welcome email responses — and if the topic is about city business I will respond from my city email account.
Police warn on election sign interference
Clyde Hill’s police department sent multiple emails to the community over the last week in response to several reports that election campaign signs have been removed and tampered with. Here’s a screenshot from an earlier mail from CHPD:
CHPD sent an additional email out after reports of sign issues continued:
Unfortunately we need to remind everyone again that removing or vandalizing political signs is a crime. We have had several complaints that signs are missing or have been pulled out and thrown on the ground. If you see anyone doing this or have video on your ring or other cameras please send it to the police department at police@clydehill.org and we will have an officer follow up.
Police union endorses candidates
The union that represents Clyde Hill’s police officers, Teamsters #763, has endorsed two candidates in November’s races.
Steve Friedman, running unopposed for mayor of Clyde Hill, wrote “I am honored to have been endorsed by the Union (Teamsters #763) that represents the Clyde Hill Police.”
In the race for Council Seat #2, the union endorsed Steve Sinwell after interviewing him and Ashley Eckel and considering their candidate statements (link):
Mayor: property tax hike “easiest option”
City administration officials offered a property tax hike, or “levy lid lift,” as the solution for the city’s structural budget problems on Tuesday night. The mayor explained:
“I think when we were looking at these numbers, especially preparing and working our way towards this sort of presentation, it was sad but very eye opening to still see that despite the tactics that we want and intend to implement, we are still going to have that significant enough of a gap… and we need to fill it. So really — a levy lid lift would be the easiest option.” (link)
Residents and councilmembers at the meeting pushed for more analysis and review of city expenditures ahead of any decisions on a tax hike.
Based on feedback, the administration will hold a public meeting for detailed discussion of expenditures a week before the council votes on the budget in November. (The administration initially planned for that discussion to happen an hour before the council vote; link.) The city administrator noted that savings would “need to be in the hundreds of thousands of dollars” (link) to have an impact.
How we got here
We got here by a process of denial and delay. Or, more politely, by “kicking the can down the road.”
Almost three years ago, in her November 2020 Budget Message, Mayor Klaas wrote (link):
Staff has recommended that Councilmembers work with staff and the community to develop a strategy to deal with this situation long-term. The use of reserves to balance the budget is not a sustainable long-term strategy.
The problem is that the work “to develop a strategy” simply didn’t start until 2023.
During 2021 and 2022, the budget process rituals that resulted in the 2022 and 2023 budgets were mostly presentation by the administration. There was little discussion of goals or policy, and the budget was mostly a fait accompli. The council pushed for a more serious effort to address the structural budget problems during calendar 2023 and the 2024 budget planning process.
Councilmembers Steve Friedman and Bruce Jones spent the last year trying to work closely with administration on solutions.
Concerned about lack of visible progress back in May 2023 (link), the city council approved a statement that the city council “will only consider budget proposals for 2024 that eliminate the city’s future operating deficit.” The statement noted that the council looks “forward to working together with the community and the administration on this challenge on behalf of residents.” Councilmembers Friedman, Muromoto, Jones, and Hachamovitch voted for the measure; Councilmember Ashley Eckel abstained.
For more context on this year’s budget and how we got here, please refer to this newsletter from last month (“Half-million dollar ‘hole’ in first draft of 2024 city budget,” link).
Options exhausted?
During last week’s meeting, the city’s finance director said “We need to figure out a way to fill this deficit or eventually we’re going to run ourselves out of money.” (link) She noted that “nobody wants to get to this place, but we are kind of running out of options.” (link)
The discussion Tuesday night walked through planned increases in fees and utility taxes, as well as the use of federal and state grant money and city reserves to offset the gap between city expenditures and revenue. You can read the slide deck here (link) or watch the entire meeting and discussion here (link).
City officials called out an approximate half million dollar shortfall, or deficit, even after all the current proposed changes:
Levy lid lift
By law, cities in Washington have a 1% “lid” (or limit) on how much they can increase (or “lift”) the property tax levy on residents each year.
Cities can put a “levy lid lift” — permitting an increase of property taxes beyond that 1% limit — on the ballot for voters to consider. In 2019, the City of Medina faced budget issues and asked voters to approve a significant property tax increase. You can read the ballot measure and statements for and against here (link), as well as local news coverage here (“Bill Gates and Jeff Bezos live there. So why is Medina asking its residents to pay more in property taxes?,” link).
Tuesday night’s meeting did not propose a specific tax increase for Clyde Hill or seek consensus on the matter.
What residents can expect next
Residents can expect another meeting in November for more detailed discussions of expenditures. It’s unlikely that that meeting will result in balancing the proposed 2024 budget.
Residents can also expect the administration to hold a public hearing in November and then ask the city council to enact the proposed 2024 budget. It’s my understanding that enacting the budget is legally required for the city to continue operating. Not enacting a budget is somewhat uncharted territory.
Calls between now and these November meetings to cut city services in order to balance the budget will collide with the operational complexity of running a city and are (I think) unlikely to produce change.
Residents can expect a new mayor in Clyde Hill in January 2024 as well as some changes on the city council. Finding a sustainable budget strategy and approach to providing city services on behalf of residents will fall to the new mayor and the next session of city council.
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Dean Hachamovitch